The European Union has agreed to set up a series of financial regulators. The new regulators will monitor banks, insurance companies and trading on the financial markets.

Reporter:Jonty Bloom

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The European Commission is keen to point out that this agreement will create a new EU-wide system of financial watchdogs which will complement the work of the existing national regulatory bodies, not replace them.

But this is still a controversial move as it creates a system of EU-wide financial regulation especially over bodies such as credit rating agencies that can affect the whole European economy. And in an emergency the proposals will allow these new financial regulators to ban risky financial investments altogether and require national regulators to take joint co-ordinated action.

Such powers will be controversial especially in the UK and Germany, which are worried that a new EU-wide system will undermine their own national regulators and threaten the success of financial centres like London and Frankfurt.